Time to Diversify Your New Investments
This last two months have been quite a ride for new investors. Financial advisers saw a spike in millennial investors looking to strategically enter the stock market with many reporting an average investment of over $25k. Those that did invest around $25k when the market crashed would have already returned between $5k and $10k as the market has already repaired quite a bit. Now, long-term growth is where investors need to focus - short term is possible, but it will be much less common.
Many companies are overweight right now with a variety of factors causing a distortion of their value - a big factor being federal loans. Many companies will not be operating at their fullest potential as the economy recovers over the summer and stocks may slowly come down in value before they go back up, so now is a good time to diversify the new investments made this year.
Let's look at two good investments.
The first is the iShares US Technology fund. The fund consists of over $4.6B and has returned an average of 15% per year (much higher than the S&P 500 average return of 9.5%). As investors have seen, technology stocks were not as badly harmed as others during the pandemic - it proves them a bit more stable.
The second is the classic Berkshire Hathaway (holding company). The company owns many corporations, and strategically invests in new ones to provide an average annual return of 20% - double that of the S&P 500.
Do your research, diversify, and thrive.